Amazon is testing a new way to pay publishers for driving traffic to its marketplaces in a pilot program called “native commerce advertising” or “NCA.” Through the program, the publisher earns money when it sends readers to Amazon product recommendations, regardless of whether they end up buying a product or not, according to Business Insider sources.
As most of you are aware, Amazon was one of the first online retailers to offer an affiliate program (Amazon Associates), which pays a commission on sales generated from referred traffic. The key difference between Associates and NCA is that the former only pays for sales, whereas the latter is paying for traffic on a cost-per-click basis, regardless of if it generates any sales.
CNN, Vox Media, and Future are among the small group of publishers participating in the NCA pilot, which Amazon plans to expand this year with more publishers. Amazon is pitching NCA as a way for publishers to make additional money on top of its Associates program, which means publishers can enroll in both programs simultaneously and earn on both clicks and sales.
One participating publisher told Business Insider that the program was complicated to implement and that cost per click varied widely, with rates ranging from $0.20 to $0.60, however, that's fair of most CPC programs, and NCA is just getting started.
Ready for some speculation? This is all in preparation for the domination of Amazon Retail Ad Service, which lets other retailers use Amazon's advertising technology to showcase ads on their own websites. I predict that NCA is being built as an extension of Retail Ad Service — creating new ad inventory on publisher websites, as opposed to just retail sites, which RAS currently caters to.
Currently with Amazon Associates, the publisher has complete control over which products appear on their website because they are hand selected. Whereas with NCA, the display ads are controlled by Amazon. This will allow them to sell these display ads to other brands and retailers and display them on publisher websites without direct involvement from the publisher.
Smart moves, Amazon.